Welcoming the new Staff-Level Agreement (SLA) with the International Monetary Fund (IMF), Pakistan’s top business organization has demanded immediate government action, calling for a significant reduction in the policy rate and the broadening of the tax net to alleviate the “severe pressure” on the country’s trade and industry.
President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Atif Ikram Sheikh, in a statement today, acknowledged the new SLA under which approximately $1.2 billion will be released following the successful completion of the third review of the Extended Fund Facility (EFF) and the second review of the Resilience and Sustainability Facility (RSF).
Sheikh explained that this amount, which includes $1 billion under the EFF and $210 million from the RSF, will be crucial in alleviating economic stress. He predicted that this agreement will increase foreign exchange reserves, restore market confidence, and send a positive message to international rating agencies and bilateral partners.
However, the FPCCI president warned that stability alone should not be the ultimate goal. He urged the government to immediately address the underlying obstacles hindering private sector growth to promote industrial development.
Despite expressing satisfaction with the continuity of the IMF program, Sheikh highlighted that businesses are under severe pressure due to high operational costs and global uncertainty, necessitating incentives for trade and industry.
To leverage the economic support from the IMF deal, he emphasized that the government must immediately focus on reforms. He specifically advocated for a “significant and immediate reduction in the policy rate” to boost investment and business confidence.
The FPCCI chief insisted that instead of further burdening regular taxpayers, the tax net should be expanded to sectors that are currently outside its scope. He also pointed out that additional taxes and delays in sales tax refunds are hurting industrial liquidity, an issue that requires immediate resolution.
Furthermore, Sheikh emphasized the need for institutional reforms, elimination of corruption, implementation of the rule of law, and ensuring financial transparency, in accordance with the IMF’s conditions.
Adding to these concerns, FPCCI’s Senior Vice President Saquib Fayyaz Magoon expressed concern over global risks. He identified rising tensions in the Middle East and increasing global freight costs as emerging threats to Pakistan’s trade, and argued that in the current environment, domestic economic policies should be supportive rather than a burden.
The business organization reiterated its commitment to cooperate with the government and clarified that it is ready to help formulate policies that encourage sustainable industrial growth, promote exports, and improve the overall business environment.